May 06, 2014

“I am not worried about Nkandla. Not a single person said to us during the campaign they were worried about Nkandla. People are not worried about that. They don’t think it’s an issue that will affect how they vote. This is an issue raised by bright people [those who think they know better]. It has not worked. [Nkandla] is just a homestead of a man called Zuma who happened to become president. From when I became deputy president, I was told I couldn’t be in a car without bullet proof. It’s a benefit. Must I pay for those benefits? Why? When I go the United States, I use [state] aircraft. Must I pay for that? Why is it that the law has to change when we deal with Zuma,” he asked.

He said it was unfair to suggest he should be held accountable for the exorbitant spending at Nkandla.

“I can’t be responsible for construction [at my house, and] that so-and-so inflated prices. How was I expected to see that? Where would I be when that happened? I am running the country.”

Words escape me here. The people that are not worried about Nkandla are those who are the poorest of the poor. They have nothing other than to cling to ANC lies. The people that do care are those who actually paid for it - people like me and probably most of the readers of this blog.

And then there is the actual delusion that he's running the country. The only thing he can properly run or manage resides south of his abdomen.

If like me, you don't have a passport from another country and you quite like living in South Africa, now is quite an important time for you. Instead of using clichés like "the future is in your hands...." or "make your mark, let your voice be heard!" and other ineffective drivel, I am going to just draw your attention to the following:

Bob Mugabe had to amend the constitution of Zimbabwe to allow him to remain in power as president, long after he had reached his intellectual sell-by-date. (Before this, as in all "democracies", there was a limit to the number of terms which a president could serve). Having changed it once, he did it again. Then he was on a roll. The rest of the story we all know very well. With hindsight, we can see that had he been prevented from taking the first step, the whole sub-Saharan part of Africa would have been spared quite a lot of bother.

When Hitler took over Germany he systematically turned it into a fascist police-state, where no-one (no, not even German citizens) had any freedom. He did this by passing one piece of legislature after another. Slowly he started to ban things (like women shaving their legs and underarms). Next he formed a special police force which was under his personal control (the infamous Gestapo) to enforce these new laws. Then he banned some more things, like jokes, clever books and talking about him behind his back. By the time he had mobilised his army, and banned being Jewish or trying to stop him from invading your country it was TOO LATE! He had gained too much momentum.

"How did Hitler and Bob manage this?" you may ask. Baby steps.

Each time they changed something, they convinced all the stupid people that it was for the greater good. Clever people, who could tell that it wasn't, thought to themselves "Surely they won't get away with this" over tea and rusks, but did nothing. By the time someone decided to stand up and make a scene, his house had been burned down and his head was firmly wedged between an S.S. boot and the pavement outside.

Now, I'm sure we all agree that one "Jacob Gedleyihlekisa Zuma" possesses neither the intellect, balls or charisma to start a world war. However, he has somehow managed to wangle his way into a position where he can very well take the first baby step towards making a complete pig's ear of our country. Old-school racist whites are always on about our country going to the dogs and ending up like Zimbabwe…... Of course they did this because they were narrow-minded and ignorant, not because they were keeping a keen eye on actual political developments. Our downfall will not be racism as everyone predicted in 1994, it will be corrupt politicians driven by greed and a hunger for power. And people drinking tea saying "surely they won't get away with that?".

Now, JZ's trial has been scheduled for August (which is AFTER the election). After winning the election, the ANC plans on amending the constitution to prohibit the acting president from being prosecuted in a court of law. Just like with Bob Mugabe, the most fundamental law of the country will now be changed to suit the whims of a criminal with no brain. (Never mind the fact that this would actually mean that he could literally commit murder and get away with it until he steps down as president). Our constitution is literally the anchor which stops our country from drifting down river and over the edge of a waterfall. It leaves ultimate power in the hands of the courts and judges and prevents government from raising itself above the law. To allow anyone to mess with it is equivalent to committing a slow national suicide.

The ANC no doubt thinks they will again get the two thirds majority they need to tinker with the constitution in the April election.

I beg to differ. I hope and believe that, unlike the sheep of the past in Germany and Zimbabwe , the average person who receives this mail has actually had enough of all these shenanigans and would like to see the appearance of justice, logic and efficiency in government. Unfortunately, we are in the minority. However, to prevent things from getting worse really fast, all we have to do (for now) is:

VOTE !!!!!!!!

And then, when the election comes, vote for anyone except the ANC. You can vote for Vernon Koekemoer or Skippy Peanut Butter for all I care, just as long as no one gets a two-thirds majority! I swear on my grandma's grave... if I hear someone (who didn't vote or couldn't vote because they were too lazy or hungover to register) complaining at a braai about the government I will come in from the side with a flying head-butt which will leave you so brain-damaged you'll join the ANC youth league and vote for Julius Malema in 2014.

This country is genuinely amazing, let's not let a small handful of people use it as their personal monopoly set and turn it into another post-Colonial African 3rd World sad story. Vote, dammit! People are willing to die fighting for the right to vote. If you don't, and you end up watching as the country slowly slides into an abyss it will be "on you".

April 16, 2014

In my opinion black economic empowerment as a policy has about three years to live from April 2015. It will survive in certain areas but as far as the general business population is concerned it will be a non-event. Yes there is a great concern about the policy that Rob Davies has published – but in fairness to Rob, every one of his policies are cause for concern. His love of red tape is the stuff of legend. In some cases he is going to seriously hamper any form of economic growth, in other cases like that of BEE it will just fade away – just like the memories of Zuma, Davies and cronies.

So what happens in the next three years? The Wall Street Journal is paying attention to Davies' policies. In a very well written blog post for an international correspondent, Gregory Millmanwrites

The changes seem to have some wondering whether South African business is worth the trouble of complying. One source familiar with the thinking of U.S. companies in South Africa requested anonymity but emailed, "The new Codes that will be implemented in April 2015 are seen as very difficult to comply with. Ownership will be a mandatory requirement…the new Codes are going to have the effect of firms looking elsewhere to set up office.

As damning as this paragraph is, it's not something that we haven't seen before. I suspect that this is probably closer to the last straw. BEE in itself is not the biggest concern that foreign businesses have; they worry about labour issues, currency volatility, political instability and the Promotion and Protection of Investment Bill. Regarding the latter, EU Trade Commissioner Karl De Gucht said

You have unilaterally put an end to bilateral investment agreements. This is bad policy. You need investment. This is not the way to do it. We, the EU, are the biggest investors in South Africa. Our investment is going down.

Perhaps echoing the sentiment that many US companies express Millman writes of ownership

Some approaches to compliance with B-BBEE can put companies at risk of non-compliance with the U.S. Foreign Corrupt Practices Act. Companies often achieve ownership targets through up front share grants to black partners, with the purchase price paid out of subsequent dividends. "It is almost a government-enforced slush fund," said one Washington D.C. based international trade attorney. "The requirement to cut in black South Africans basically invites companies to find a mechanism to transfer wealth to a select group.

It's clear that foreigners have had enough of Davies and his rules. Soemone said to me that he needs his head read, it's already red.

What then about those who are going to be left having to comply with BEE once everyone has stopped bothering. Certain companies have contractual obligations to meet a certain BEE level in order to retain licences. Gambling is one- they have to stick to a level 2. Liquor licenses (which fall under the DTI) are the next to do this. But that's not all, the Manufacturing Competitiveness Enhancement Programme (MCEP) requires companies to be a level four contributor or show how they will become so within two years. Those who apply for this will need to consider that the revised BEE codes kick in in April 2015 and a level 4 (under an impossibly onerous scorecard) is now 80 -90 points. Do those who want to apply for grants under this programme know what they are getting themselves in to?

In each of Davies' policies it appears that he thinks that people WANT to go through all these hoops. He uses the word "incentivise" often – but offers no incentives at all, just red tape.

There is an upside. I think that BEE has run its course, I also believe that those connected professional blacks led by Sandile Zungu know this too. They've devised a policy that allows them to milk the system (akin to a licence to loot) for three years. By then they've sown up all the government business and have retired extraordinarily wealthy. They probably also know that political patronage is a fickle game – when your meal ticket has left the building you are thrown out with them. It'll be like the fall of the Berlin Wall, the BEE soldiers will turn a blind eye and companies will stop complying. The trick now is to be the correct lip-service to the policy so that it appears as though you are "committed" to it in the interim.

As to where the poorest of the poor who live because of donations under SED are going to go for money – that needs to be seen. I expect a great deal of hunger and dissatisfaction from these people.

What then are we burying, BEE or South Africa? The answer is very obvious under the Zuma government.

January 27, 2014

Mal Ossie Gigaba has graced the hypertexted (and password protected) BDLive again. This time he was addressing the BMF.

Mr Gigaba briefed the forum about business opportunities arising from the development of the Durban-Free State-Gauteng logistics and industrial corridor, which is the second strategic integrated project (SIP) of the national infrastructure plan. It is the most important economic corridor in the country. He said changes to legislation, including a review of the Preferential Procurement Policy Framework Act, were vital to hastening the expansion of a black industrial class in South Africa.

The act has drawn sharp criticism from black business groups and even state agencies which believe the government's overwhelming bias towards price in evaluating tenders restricts the potential to develop new industries and supply chains. Programmes of sufficient scale, they said, were worth paying a premium for, because of the benefits they could bring to long-term economic development.

"We are persisting in our effort, working with other government departments, to seek a review of the act in order to be able to achieve the goal of faster and more radical empowerment," Mr Gigaba said.

His comments were welcomed by the Black Business Council (BBC), which has said it is impossible for black-owned companies to compete with large firms when it comes to doing business with the state.

Funding was a key concern, BBC CEO Xolani Qubeka said. The act in its current form was "antitransformation". His criticism is based primarily on the 90:10 (price to socioeconomic ratio) gauge used for the adjudication of tenders.

Mr Qubeka believes the act should be replaced by "set-asides" of 40% of the work for black firms. A normal tender process would determine a winner, and would ensure that high standards are adhered to.

And the keywords are shot around the room. Radical empowerment, antitransformation and set-asides. Radical Empowerment and set-asides are unfortunately blocked by the PPPFA. Hence it's a useless act (according to the VERY EXCLUSIVE Black Business Cabal). Strangely though there is some merit to what he says, I think the idea of the state paying a premium to create sustainable black businesses that pay taxes and employ people is a good idea. It's a pity that it's limited to only black business but that's an argument for the next millennium. But even the least jaded person knows that these best intentions will amount to nothing. The very connected (many of whom are prominent members of the BBC) are just going to get even richer through entitlement and the poor will, well remain just that. .

I need to understand this whole process. It is an election year, one that hopefully results in the ANC taking a complete pounding at the polls. Rhetoric like this is aimed at those disgruntled African people who can see the ANC for what it is and have drifted away from its rudderless boat. It's a nice promise – we'll change the law to make sure that you as a black (read African) person will win many state tenders and become rich. You won't even have to compete on price or capability, it will just land in your lap. In the case of set asides, it'll only be black people bidding on these which will limit the competition even more. Money for jam, hey Sandile.

BUT – the PPPFA just keeps getting in the way. Not only the PPPFA, it's also the PPPFA's gatekeeper Treasury that keeps on preventing these poor and disgruntled Zungs from walking in and grabbing their entitlement, which is state business. The PPPFA has to go. The BEE codes have already promoted black businesses to a level that no other company will ever be able to compete with. Why can't the PPPFA do the same. As an aside you'll see that all of this activity is directed at state procurement and not private. I am almost sure that the private sector has little regard for the BBC because they add little value to anything. Wealth for the Zungs can only be created on the coattails of the state – and with those relationships in place the Zungs can then become the middle agent for the private sector. Everybody wins. But the PPPFA won't allow this!. You see if you outsource more than 25% of the contract to another party they have to have a better or equal BEE score than yours. Let's say you are a 100% black owned company turning over R49,999,999.99 you are automatically a level one contributor. Where on earth are you going to find a white-owned company that can vaguely compete with that? The answer is nowhere. The new codes have made it impossible to get to a level 7 let alone anything else. No – that PPPFA has to go!!!!

And the other BUT – in order to get rid of the PPPFA you need to change section 217 of the Constitution (howmany times have I written about this). You could do what Rob did with the new BEE codes, just gazette them even though they do not talk the BEE Act, the BEE strategy and by association, the Constitution. But there's a problem here – those irritating white businesses will notice what you're trying to do and go to the Constitutional Court and get your amended PPPFA thrown out (as I hope to do with the new BEE codes). So what we need to do is get to the source of the problem and remove it – the Constitution (which includes section 217). Perhaps we should start with section 217. Yes, but to get rid of or amend section 217 you must have a 2/3rds vote.

Everyone knows that the ANC does not enjoy that kind of majority. Even if they did get a 66% majority the party is so factional that they'd never get the support they need. Now you understand why Zuma is asking for a 90% majority. It's simple it allows for a 23% fallout on the vote and the ANC can still push it through. And they'll do this in the name of service delivery. Although I think that a lot of service delivery issues arose as a result of dodgy tenders anyway. But you must remember that the ANC owned the Independent news group (via OddBall Survey – more on this to come), the New Agenda (which is just useless), ANN7 (which is no longer as entertaining as it used to be) and the SABC. The latter is the most dangerous, like the Nats the ANC will only broadcast pro-ANC news. Pro-ANC news is a refutation of all anti-ANC allegations.

And this is what scares me. Are we aware of what is going on in parliament? Zuma has five years left – which means that the Zungs really need to up the ante when it comes to milking the state. And they will do just that . They'll either push it through like they did the Secrecy Bill or they'll do what Rob the Red did with the BEE codes. There is stuff going on around us and we need to keep a watchful eye out. If we don't they will bleed this country dry.